SAN DIEGO, July 31, 2018 /PRNewswire/ — NuVasive, Inc. (NASDAQ: NUVA), the leader in spine technology innovation, focused on transforming spine surgery with minimally disruptive, procedurally-integrated solutions, today announced financial results for the quarter ended June 30, 2018.
Second Quarter 2018 Highlights
- Revenue increased 8.5% to $281.6 million, or 7.7% on a constant currency basis;
- GAAP operating profit margin of 10.1%; Non-GAAP operating profit margin of 16.3%; and
- GAAP diluted earnings per share increase of 5% to $0.22; Non-GAAP diluted earnings per share increase of 29% to $0.58.
“We are pleased with our second quarter total revenue growth of 8.5% year-over-year driven by momentum in our U.S. Spinal Hardware business where we saw spine case volumes up nearly 7% versus prior year,” said Gregory T. Lucier, chairman and chief executive officer of NuVasive. “We continue to see strong demand for new product introductions from late last year and positive surgeon conversion efforts as our new Lateral Single-Position Surgery procedure gains traction in the market. Our International business also delivered a solid performance with 21% year-over-year growth.”
A full reconciliation of GAAP to non-GAAP measures can be found in the tables of this news release.
Second Quarter 2018 Results
NuVasive reported second quarter 2018 total revenue of $281.6 million, an 8.5% increase compared to $259.4 million for the second quarter 2017. On a constant currency basis, second quarter 2018 total revenue increased 7.7% compared to the same period last year.
For the second quarter 2018, GAAP and non-GAAP gross profit was $204.5 million and $204.9 million, respectively, and GAAP and non-GAAP gross margin was 72.6% and 72.8%, respectively. These results compared to both GAAP and non-GAAP gross profit of $193.2 million, and both GAAP and non-GAAP gross margin of 74.5% for the second quarter 2017. Gross margins for the second quarter 2018 were impacted by the Company’s in-source manufacturing efforts at the West Carrollton facility, which are expected to improve over the second half of 2018.
The Company reported GAAP net income of $11.5 million, or $0.22 per share, for the second quarter 2018 compared to GAAP net income of $12.2 million, or $0.21 per share, for the second quarter 2017. On a non-GAAP basis, the Company reported net income of $30.3 million, or $0.58 per share, for the second quarter 2018 compared to net income of $23.6 million, or $0.45 per share, for the second quarter 2017.
Annual Financial Guidance for 2018
The Company updated its full-year 2018 guidance as follows:
- Full-year 2018 revenue remains in the range of $1,095 million to $1,105 million reflecting reported growth of 6.7% to 7.6%, and growth in the range of 4.7% to 5.7%, exclusive of the SafePassage acquisition;
- Non-GAAP diluted earnings per share in a range of $2.37 to $2.40 compared with the prior expectation of $2.44 to $2.47;
- Non-GAAP operating profit margin of approximately 16.7% compared with the prior expectation of 17.6%;
- Adjusted EBITDA margin of approximately 25.9% compared with the prior expectation of 26.9%;
- Non-GAAP effective tax expense rate of approximately 21%, compared with the prior expectation of approximately 23%;
- The Company expects currency to have a positive impact on revenue in 2018 of approximately $3 million compared with the prior expectation of $10 million; and
- The Company expects to drive an adjusted EBITDA of approximately $283 million to $293 million.
The above guidance assumes a full-year benefit of U.S. tax reform, suspension of the medical device tax and the SafePassage acquisition.